Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Wednesday, November 18, 2015

How Communication Can Build Trust

Building trustThis journal column discusses an article written by Robert F. Hurley that was published in the September 2006 issue of Harvard Business Review titled “The Decision to Trust.” There are a number of different factors that relate to whether people will trust one another. These factors are the result of a complex mix of personality, culture, and experience. The individual person or situation is another factor that can influence trust. A current research survey of 1,000 clients of financial advisers led by Julie Littlechild shows that there is a very high level of trust. There are a number of things that advisers can do and communication techniques they can use to move the needle on trust. There are a wide range of positive outcomes that are associated with a high level of trust.

See Marie Swift and Julie Littlechild, Building Trust Through Communication, Journal of Financial Planning, November 17, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

November 18, 2015 in Estate Planning - Generally, Non-Probate Assets, Professional Responsibility | Permalink | Comments (0)

Thursday, November 12, 2015

Probate Judge In Maine Under Fire For Case Backlog

GavelA judge in Maine has been accused of creating an intentional backlog of cases in his probate court in order to retaliate against the county board that denied him a large pay raise. The court had no prior backlog of cases until the judge switched his schedule, allegedly to get more paid holidays, after his request for the raise was rejected. Wait times for name changes and probate have more than doubled in almost all circumstances with adoptions going from a 90 day maximum wait to over 6 months. The judge has a history of professional responsibility violations with him being cited numerous times by the Maine Supreme Court including for violations related to his work as a judge. No word yet on if sanctions will be applied.

See Scott Dolan, Judge denied big pay raise retaliated by causing backlog, York County officials say, Portland Press Herald, November 9, 2015.

Special thanks to Deborah Matthews for bringing this article to my attention.

November 12, 2015 in Current Affairs, Current Events, Professional Responsibility | Permalink | Comments (0)

Sunday, November 8, 2015

What Firms Should Know About Value Pricing

FirmThis column discusses some of the tenets that "movement" firms should adopt.  In today's technologically-driven society customers are not looking to buy time, but are instead looking for solutions to their problems.  Successful firms need to think about how they can best provide for their client's needs.  A firm will want to change the way it values and prices its own services.  Coming up with a new value-based pricing system will require a modification in the business culture of the entire company.  This article points out the steps firms will need to take to stay ahead of the game in adopting a value pricing system.  Transitioning to a value pricing in a business will require careful planning and the first few months may be difficult. 

See Jody Padar, Value Pricing: Is Your Firm Ready?, Accounting Today, November 6, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

November 8, 2015 in Estate Planning - Generally, Non-Probate Assets, Professional Responsibility, Technology, Web/Tech, Wills | Permalink | Comments (0)

Wednesday, November 4, 2015

New Case On Informed Consent When Representing Two Or More Family Members

GavelA women set up a trust that made her and her son life beneficiaries with a remainder interest to her son and daughter. However, a dispute arose over the trust which resulted in the son, while acting under a power of attorney, to seek assistance from attorneys which represented both the son and mother in changing the trust. As a result, disciplinary authorities were called in to investigate potential conflicts of interest by the attorneys in their dual representation but the attorneys were absolved by the board.

In In Re Szymkowicz, the D.C. Court of Appeals ruled that there was substantial risk of conflicting interest by the attorneys representing both the mother and son. It was held that even if two family members’ interests are “generally aligned,” there can be significant risk of later conflict so informed consent is required. The court did not make a determination if there was informed consent given for the dual representation and remanded the case back to the disciplinary board to make the determination.

Special thanks to Karen E. Boxx for bringing this case to my attention.

November 4, 2015 in Estate Administration, New Cases, Professional Responsibility | Permalink | Comments (0)

Wednesday, October 14, 2015

FINRA Introducing New Rules Addressing Elder Financial Abuse

AlzheimersThe Financial Industry Regulatory Authority (FINRA) is introducing new rule proposals that would let financial advisers pause orders if they suspected there to be any financial exploitation of senior investors.  The proposed regulation notices would assist member firms in protecting elderly clients that have diminished capacity.  One of the proposals creates a 15-day "safe harbor" period where advisers can hold disbursements into senior customer accounts if they suspect that fraud is taking place.  Another proposal being released would require firms to obtain the information on trusted contacts belonging to the accounts of senior investors.  A "senior investor" is any person that is 65 or older, or there is any other evidence of vulnerability.  There has also been growing interest in congress for some federal legislative proposals in this area.  

See Megan Leonhardt, FINRA Rolling Out Rules To Prevent Elder Financial Abuse, Wealth Management, October 13, 2015. 


October 14, 2015 in Current Affairs, Elder Law, Estate Planning - Generally, Non-Probate Assets, Professional Responsibility, Trusts, Wills | Permalink | Comments (0)

Friday, October 9, 2015

Court Rules That Attorney’s $14 Million Inheritance Is Not Invalid

WillA Court has recently held that an attorney violated ethical rules when he drafted a Will for a wealthy client bequeathing $14 million for himself and his children, but that his actions did not invalidate the Will itself.  The split decision by the Michigan Court of Appeals overturned a lower court ruling that invalidated the Will.  The Court held that the onus is now on the attorney to prove that he did not exert undue influence on his wealthy friend and client. 

The Michigan Rules of Professional Conduct prohibit attorneys from drafting Wills for non-related clients that include substantial gifts for the drafting attorney.  If the Will would have been invalidated then the estate would have gone to the decedent’s brother and children via Michigan’s intestacy laws.  The Michigan Appeals Court decision can be read here.   

See Paul Egan, Court: Lawyer’s $14M inheritance unethical, not invalid, Detroit Free Press, October 9, 2015.  

October 9, 2015 in Current Affairs, Estate Planning - Generally, Professional Responsibility, Trusts, Wills | Permalink | Comments (0)

Monday, October 5, 2015

Convicted Guardianship Attorney Passes Away Before Sentencing

Disgraced attorneyAn attorney that was convicted of defrauding the people that he was supposed to protect passed away before he could be sentenced.  Paul S. Kormanik was supposed to appear in Franklin County Probate Court today to answer a contempt of court charge brought on by his failure to pay back one of his victims.  Back in August Mr. Kormanik plead guilty to four counts of stealing from wards that he was the court appointed guardian of, falsifying records, and taking tax payer money.  Kormanik had bragged in the past that he had the most wards of any guardianship attorney in the State of Ohio representing over 400 wards.  The disgraced attorney was one of several guardians highlighted in an investigative report from May 2014 titled “Unguarded.” 

See Mike Wagner, Convicted guardianship lawyer dies before sentencing, The Columbus Dispatch, October 5, 2015.

October 5, 2015 in Current Affairs, Estate Planning - Generally, Guardianship, Professional Responsibility | Permalink | Comments (0)

Thursday, October 1, 2015

Court Holds That Attorney Does Not Owe Duty Of Care To Estate Beneficiary

JudgmentAn appeals court in the State of Washington has held that an estate planning attorney does not owe a duty of care to the beneficiary of a client's estate.  In this case the beneficiary, Jennifer Linth, wanted to sue estate planning attorney Carl Gay on legal malpractice for improperly executing estate planning documents.  The Washington Court of Appeals affirmed the trial court's decision that Mr. Gay did not owe Ms. Linth any duty of care.  Mr. Gays duty to the trustee does not extend to a non-client beneficiary.  The full text of the Washington Court of Appeals decision in Linth v. Gay can be read here.  

See Attorney Does Not Owe Duty of Care to Beneficiary of Client's Estate, Elder Law Answers, October 1, 2015. 

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

October 1, 2015 in Current Affairs, Estate Planning - Generally, Professional Responsibility, Trusts, Wills | Permalink | Comments (0)

Tuesday, September 29, 2015

Estate Of Pistons Owner Sues Deloitte Over Flawed Tax Plan

ArticleThe estate of late Detroit Pistons owner Bill Davidson is suing Deloitte Tax LLP over what it calls a risky and flawed estate plan. The suit claims that the tax planner intentionally used dubious planning techniques to create the perception of savings in order to draw in Davidson in as a high profile client they could use to lure other high net worth individuals. The estate seeks in excess of $500 million in damages to cover the increased tax the estate was forced to pay plus interest and penalties. As of now, no trial date has yet been set.

See Mark Hicks, Davidson estate sues Deloitte Tax over $2.7B IRS bill, The Detroit News, September 24, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

September 29, 2015 in Current Affairs, Current Events, Professional Responsibility | Permalink | Comments (0)

Monday, September 28, 2015

Wisconsin Estate Planning Attorney Facing Prison Time For Fraud

JudgmentA former estate planning attorney that is facing an extensive 33-count Federal indictment will likely face prison time after making a plea agreement to five of those counts.  Sarah E.K. Laux faces allegations that she took advantage of elderly clients that came to her for estate planning and trust services.  Federal investigators got involved in this case when allegations surfaced that she had stolen up to $3 million from two wealthy clients.  More lawsuits and investigations followed leading to the current plea bargain agreements.  “Laux will plead guilty to five of the 33 counts in the indictment, one each of bank fraud, mail fraud, wire fraud, money laundering and filing a false tax return.”  Prosecutors are agreeing to a below the guidelines sentence provided that Laux reveals everything she stoles and assists them with recovering the lost assets. 

See Bruce Vielmetti, Estate planning lawyer facing prison in fraud plea deal, Milwaukee-Wisconsin Journal Sentinel, September 27, 2015.

September 28, 2015 in Current Affairs, Estate Planning - Generally, Professional Responsibility, Trusts, Wills | Permalink | Comments (0)